Burn­ing ques­tions

Peo­ple worth tack­ling

Finweek English Edition - - Mining indaba - COPY: David McKay AD­VER­TIS­ING: Hay­ley Good­win

YOU’RE STROLLING around the con­fer­ence venue mind­ing your own busi­ness when you hap­pen upon an im­por­tant min­ing in­dus­try per­son­al­ity. What do you do? Wan­der hap­lessly to­wards the cof­fee stand and stale dough­nuts, pick up a cor­po­rate brochure you know you’ll never read or stand your ground and make like a jour­nal­ist? But you only have time for one ques­tion. So what is it? AS ONE of the world’s most ac­cu­rate com­men­ta­tors on the gold mar­ket, this is a meet­ing you can’t af­ford to botch. By all ac­counts, Muren­beeld is one of the more cour­te­ous mem­bers of so­ci­ety, as well as be­ing fright­en­ingly good at mat­ters in­volv­ing gold. In­ter­est­ingly, his usual method of fore­cast­ing the gold price is not to ac­tu­ally fore­cast it at all but to set out sce­nar­ios in which the metal may trade. Each sce­nario is given its own in­form­ing fea­tures.

What not to say: “So when is gold go­ing to US$3 000/oz and what do you think of the cam­paign by the world’s banks (Gold­man Sachs and JP Morgan in par­tic­u­lar) to sup­press the gold price?”

Muren­beeld has an econ­o­mist’s eye for the gold price and tends to fight shy of con­spir­acy the­o­ries, no mat­ter how com­pelling they may sound.

To even start vaguely im­press­ing Muren­beeld, try ask­ing about the dou­ble US deficit and whether its po­ten­tial ef­fects on the value of the US dol­lar will con­tinue to in­form the price of gold.

ROY PITCH­FORD

African Plat­inum CEO

MARTIN MUREN­BEELD

Chief econ­o­mist, Dundee Group of Com­pa­nies IF ROY PITCH­FORD looks slightly more worn around the eyes it could be due to the strug­gle for supremacy un­der way at African Plat­inum. So best approach Pitch­ford care­fully.

And don’t men­tion the war. That’s the bat­tle with North Sound Cap­i­tal, Af­plats’s largest sin­gle share­holder (13%), which hopes to re­peat last year’s share­holder ac­tivism. It was North Sound Cap­i­tal, a US hedge fund, that suc­cess­fully forced Af­plats chair-

man Ed­ward Hansard to re­sign be­cause it be­lieved he was not up to the job.

Now North Sound is ask­ing Af­plats to in­crease the R1,1bn sale price on about 30% of the com­pany to Im­pala Plat­inum. That’s equal to £0,45p, but North Sound reck­ons it should be £0,70/share and says it can rus­tle up 30% of share­holder op­po­si­tion. It’s all very dis­tress­ing for Pitch­ford, who won’t con­firm North Sound is the dis­sent­ing share­holder.

If it’s con­fronta­tion you want, try ask­ing whether his deal with Im­pala

is go­ing to fall through.

You can ask Pitch­ford his view on plat­inum group met­als prices, or whether the com­pany will list on the JSE (an­swer: no), or even if he thinks Af­plats’s main as­set, Leeuwkop, could re­ally pro­duce 1m oz of PGMs.

How­ever, if it’s out­right con­fronta­tion you want try ask­ing whether his deal with Im­pala is about to fall out of bed and why he thinks North Sound is tak­ing that ad­ver­sar­ial stance. Is it re­ally be­cause the US hedge fund has gone through dif­fi­cult times and needs to reap as much profit from its re­main­ing in­vest­ments as pos­si­ble?

SANDILE NOGX­INA SA’s De­part­ment of Min­er­als & En­ergy Di­rec­tor-Gen­eral

DON’T BE DE­CEIVED by his happy and wel­com­ing de­meanour. Sandile Nogx­ina, who is sure to be trawl­ing through the con­fer­ence cor­ri­dors, is one of SA min­ing’s most in­flu­en­tial fig­ures. He’s also an ad­vo­cate and, ac­cord­ing to spec­u­la­tion, worked in the intelligence di­vi­sion of the rul­ing African Na­tional Congress’s mil­i­tary unit, Umkhonto we Sizwe.

With a di­rect line to Cabi­net (as well as Moscow, some say), Nogx­ina helps de­cide whether SA’s largest and small­est min­ing com­pa­nies get their li­cences to mine in SA. You could just ask whether the li­cens­ing process, by which SA and for­eign firms achieve their se­cu­rity of ten­ure in re­turn for promis­ing black em­pow­er­ment, is speed­ing up.

Don’t be de­ceived by the happy

wel­com­ing de­meanour. This man makes min­ing ex­ec­u­tives cry.

But you could also ask why Im­pala Plat­inum’s ap­pli­ca­tion to earn new or­der min­ing li­cences has hit a rock; whether An­glo Plat­inum has a chance any time soon of achiev­ing the same; and whether de­mands to sell 51% con­trol of a new or­der prospect­ing li­cence is killing SA’s ex­plo­ration in­dus­try.

It’s all touchy stuff, in­clud­ing a re­port by SA’s Cham­ber of Mines, which said min­ing laws had de­prived SA of be­tween R5bn and R10bn in fixed in­vest­ment. You could ask him – if you dare.

GREG KIN­ROSS CIC En­ergy CEO

GREG KIN­ROSS has a men­ac­ing, prowl­ing am­bi­tion about him – which you’d prob­a­bly want if you were a share­holder in the com­pany. It sug­gests hunger for suc­cess and a la­tent ag­gres­sion just bub­bling be­low the sur­face. You’ve got one chance at a ques­tion and, cur­rently, the best min­ing poser for Kin­ross is who’s go­ing to win the con­tract for the US$5bn Mmam­ab­ula coal project in Botswana.

Last year, Bri­tish firm In­ter­na­tional Power was ap­pointed the in­de­pen­dent power pro­ducer to the Mmam­bula project, but there hasn’t been a de­ci­sion on which com­pany will mine the de­posit, ef­fec­tively on SA’s border. Kin­ross said at the time of In­ter­na­tional Power’s ap­point­ment in Oc­to­ber that an up­date on the min­ing con­tract was due in Novem­ber.

The first phase of the project will in­volve the de­vel­op­ment of a 12m t/year coalmine. “We hope to have that tied up by year-end,” said Kin­ross at the time. Still wait­ing.

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